Coca Cola bottler exceptional year called enthusiastic

Coca Cola HBC, one of the leading bottlers of the famous fizzy drink, has reported what it dubbed an ‘exceptional’ set of results for 2017 with sales revenue up 4.9 per cent.

The company bottles the drink produced by The Coca Cola Company and said annual sales volumes were up 2.2 per cent over the year with growth across all sectors except Nigeria and Russia.

But with its share price rising just 3 per cent on the back of the results, analysts suspect its claim of ‘exceptional’ performance may have been a bit over-eager.

Coca Cola HBC is the lead bottler for drinks produced by the bigger Coca Cola Company

Comparable earnings before tax were up 20 per cent last year according to its latest trading update, hitting €621 million.

‘Management of bottling partner for The Coca Cola company, Coca Cola HBC, this morning described its full year results as ‘exceptional’ however, with the shares rising by just 3 per cent at open, we’d suggest this is a little enthusiastic,’ The Share Centre’s analyst Helal Miah said.

New flavours of drink proved popular with consumers with the likes of Coca Cola Lime, Coca Cola Zero Lemon, Sprite Cucumber and eight new Fanta flavours increasing sales.

Traditional Coca Cola sales were up 2.6 per cent while Coke Zero sales soared more than 22 per cent higher last year, the company confirmed.

Zoran Bogdanovic, chief executive officer of Coca-Cola HBC, said he was ‘delighted’ the company grew volume, revenue and margin over the course of the year.

New flavours for drinks such as Fanta – which saw eight new variations – helped push up sales volumes in 2017

‘We are excited about the year ahead, which has a particularly strong pipeline of product innovation and commercial activity around our route to market and in-store execution,’ he added.

‘There is good momentum in the business and a determination to build on our success. We are confident that 2018 will be another successful year.’

Miah said the share was recommended as a ‘hold’ for Share Centre investors.

‘These results were driven by improving conditions across the majority of the group’s markets, except Russia and Nigeria, but also as a result of initiative such as forcing price increases, careful management of input costs and increased marketing efforts,’ Miah said.

‘Looking ahead, Coca Cola HBC’s outlook is also quite positive. They expect further improvements in the volume price mix to deliver another year of growth, and it’s anticipated that operations in Russia and Nigeria should return to growth whilst operating efficiencies will still be in focus.’